M A L AYSIA IN VESTM EN T P ER FO R M A NCE R EP O RT
FORGING FORWARD
2017
8
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
RECENT DEVELOPMENTS
9
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
OUR ECONOMY REMAINS RESILIENT IN THE WAKE OF GLOBAL UNCERTAINTY …
10
WTO members praised Malaysia at the Trade Policy Review 14-16 Feb 2018 for:
- Strong and inclusive growth as a result of our prudent macroeconomic management
and diversified economy
- Domestic reform, services sector liberalisation, enhanced private sector participation and
trade openness which contributed to growth
Total trade: RM1.8 tril (2017)
increased by 19.4% from RM1.49
tril (2016)
- Biggest growth in 13 years
- Jan 2018: total trade stood at
RM156 bil (14.9% increase
compared to Jan 2017)
FDI inflow: Following record high of
RM47.2 bil (2016), our FDI in 2017
remained at healthy level of RM39.2
bil
- On average, we have received RM39.9
bil of FDI annually for the last five years
GDP: Annual growth of 5.9%
(2017); significantly higher than 4.2%
(2016)
- Among the highest growth in
ASEAN
- Private investment grew at a faster
pace of 9.2%
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
COMPARISON OF MALAYSIA FDI AND DIA STOCK
2010 2011 2012 2013 2014 2015 2016 2017
FDI 313 366 406 446 475 501 547 565
DIA 299 338 368 421 473 584 566 523
RM
bill
ion
FDI Stock in 2017 stood at RM 565 billion
DIA Stock in 2017 stood at RM 523billion
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MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 12
WE CONTINUE TO RECEIVE INTERNATIONAL ACCOLADES
23rd most competitive nation and 13th most
inclusive development among developing
economies
- Strength of investor protection (3rd)
- Burden of government regulation (5th)
(September 2017)
24th for ease of doing
business
- Getting credit (20th)
- Protecting minority investor
(4th)
(November 2017)
24th most competitive
economy
- Economic performance
(13th)
(June 2017)
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 13
STRENGTH OF OUR ECONOMY IS REGOGNISED
5th most attractive
emerging market
(January 2018)
Good ratings given to our economy:
A- (August 2017)
A3 (December 2017)
A- (June 2017)
1st the most developed
Islam economy
(November 2017)
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
‘America First’ policy – President Trump vows to address the problem of trade
imbalance. United Kingdom is pushing ahead with its Brexit negotiations – a tough journey
that will fuel further uncertainty along the way. Mixed signals from France; promising reform on one hand while there is concern on
blocking foreign acquisition of French companies in strategic sector.
China has been tightening its capital outflow rules since 2016 – restricting large overseas M&As. Its total capital outflow was estimated at USD166 bil (2017), down 67% from USD500 bil (2016) and 78% from USD761 bil (2015).
RISE OF PROTECTIONIST SENTIMENT ACROSS THE GLOBE
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MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
TAX REFORM AND TARIFF ON STEEL & ALUMINIUM BY PRESIDENT TRUMP …
15
22 Dec 2017: Corporate tax was slashed from
35% to 21% to invite more companies to
move back to the US
16 Feb 2018: Global tariff of at least 24% on all
steel imports and 10% on aluminium products
imports
Despite this, the interest among the US firms
to continue investing in Malaysia remains high.
Our companies have not been impacted by the
tariff hike but we are closely monitoring any
further development.
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
RECENT DEVELOPMENTS IN MALAYSIA …
16
28 Feb 2018: YAB Prime
Minister announced that the
PETRONAS-Saudi Aramco
partnership in RAPID Johor
has been finalised and the
committed investment of
USD7 billion will be
transferred to our account by
end of March.
26 Feb 2018: Peugeout
buys 56% stake in Naza’s
plant in Gurun, Kedah to
establish its ASEAN Hub
- Peugeout models set to be
produced in 2018 and
Citroen models to be
produced in 2019
23 Feb 2018: SK Group
which has been operating in
Malaysia since 2013, will
now establish a Regional
Head Office here covering
ASEAN, India and the
Middle East for a blue ocean
shift.
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
MALAYSIA AS THE GLOBAL HUB
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MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
GLOBAL ESTABLISHMENTS
Services
18
Principal Hub (PH)
PH is a locally incorporated company that uses Malaysia as a base for conducting its regional or global business that involve key functions
Under the PH scheme, a total of 28 PH projects approved to setup their regional headquarters in Malaysia.
Business commitments RM28.57 billion
Ancillary services of RM2.35 billion
2,020 high-value jobs for Malaysians
over the next 10 years
Representative Offices (RE) and Regional Offices (RO)
216 investment were approved worth RM374 million (33.6% higher than 2016)
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 19
B. Braun Medical Industries Penang was recognised as the Global Center of Excellence for Intravenous Access (CoE IVA) products, which comprises production and R&D functions. The Penang-based CoE is the very first CoE established outside Europe.
Center of Excellence for Intravenous Access Products (CoE IVA)
BMW began its operation in Malaysia with only assembly facilities and sales showrooms (36 in 2015) Expanded into Regional Parts Distribution Centre (RDC) operations to support 23 countries. Ranked among the Top-10 of BMW Distribution Centres globally.
2004
Initially established in PTP with a warehouse size of 15,000 sq. m.
2017 Moved to Senai with capacity of 45,000 sq. m
To expand this facility to 65,000 sq. m.
2025
Since 1988 Total investment of over RM30 billion and employment of 500 people (100% Malaysian; 40% knowledge – workers)
1988 Only focused on manufacturing and test activities
2011 Global Operations Hub • IC testing • R&D for
semiconductors • Procurement
2022 Principal Hub • Intellectual Property
Management • R&D and Innovation • Advanced
Automotive Technology Centre (production of automotive sensors on chips)
Regions served: USA, Europe & APAC
Regional Parts Distribution Centre (2004)
Global Center of Excellence (2005)
Global Operations Hub / Principal Hub (2011)
International Procurement Centre (IPC)
2005 Extension of IPC
2013
2006 Global Centre of Excellence for Intravenous Access (CoE IVA)
COMPANIES WHICH HAVE MADE MALAYSIA THEIR BUSINESS HUB OVER THE YEARS
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 20
2001
Began operations as a Technical
Training Centre to support related
companies in Asia.
2006 Set up a Shared Service Centre
(Finance & Accounting) for Asia.
McDermott has 100 years experience in the Oil & Gas
industry. It Moved its Asia Regional Oil & Gas Hub from
Singapore to Malaysia. This Asia Regional Oil & Gas Hub
serves 7 countries by managing:-
Central project oversight
Supply chain coordination
Engineering Centre of Excellence
400 regional positions and engineers
12,400 employees worldwide
Has evolved into a Global Operational Headquarters (GOHQ) which supports over 100 countries worldwide by managing:- Data Hosting Centre Technical support Strategic market development Customer Solutions Integration & Innovation Experience
Centre (Trains 300 students yearly)
Asia Regional Oil & Gas Hub (2016)
Global Operational Headquarters
COMPANIES WHICH HAVE MADE MALAYSIA THEIR BUSINESS HUB OVER THE YEARS
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 21
5,900 employees 90% Malaysian
1912 Nestle Group began its
operation in Malaysia 2017 Establishment of
Nestrade’s Asian
Procurement Hub.
Today, Nestle’s only
Global Procurement
Hub apart from
Switzerland and
Panama.
Operates 8 production facilities
Procures raw materials for 100 countries
Honeywell has been in operation for 33 years in Malaysia and it began its presence here through manufacturing and sales & services operations (6 entities)
Total investment of RM2 billion
1,500 employees
2018
To set up Honeywell Group’s 1st Global Procurement Centre in Malaysia to support 100 countries worldwide.
2017 Establishment of Honeywell’s ASEAN Headquarters (under the Principal Hub scheme):- • 400 staff members, including 50 regional
leaders and experts. • Business development of Aerospace, Oil &
Gas, Building Technologies and Safety & Productivity segments
Ikea has made a strategic decision to establish its Regional Distribution and Supply Chain Centre for ASEAN in Malaysia.
The Centre, which will adopt the structure and technology of IKEA’s biggest Regional Distribution Centre in Germany, will also be among the top 10 largest Regional Distribution Centres of IKEA globally.
Centre will serve 12 retail stores in the region
RM907 million (within 5 years)
Global Procurement Hub (2017)
ASEAN Headquarters (2017)
Regional Distribution Centre (2017)
COMPANIES WHICH HAVE RECENTLY MADE MALAYSIA THEIR BUSINESS HUB
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 22
OTHER MNCs WHICH RECENTLY OPENED THEIR BUSINESS HUB
Air Liquide (France, Forbes Global 2000)
Regional Smart Innovative Operations Centre
One of the world leaders in industrial gases, technologies and services
for Industry and Health
Oracle (USA, Fortune 100)
APAC Digital Sales Hub
World No 1 Integrated Cloud Application and Platform
Services Provider
Givaudan (Switzerland, Forbes Global 2000) Global
Business Services Hub
World largest company in flavors and fragrances
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 23
MORE INVESTMENT IN DIGITAL TECHNOLOGY & SERVICES
EDUCATION
NORWAY/MALAYSIA ENERGY & RESOURCES
AUSTRALIA
o Innovative geosciences
company for oil and gas
industry
o Patent holder for seismic
processing solutions
o Big data analytics
platform & consulting
for strategic HR
management and
workforce of the future
o Re-domiciled to
Malaysia from Norway
Average Salary (excl. CEO):
RM13,841 RM20,705
INTELLIGENCE
GERMANY
o World leader in lawful
interception & intelligence
solutions to >35 governments
globally
o Malaysia to host their 24/7
Monitoring Centre and
Intelligence Platform
RM24,264
Average Salary (excl. CEO):
TECHNOLOGY
FRANCE
o World leader in 3D design,
3D digital mock-up
o Malaysia to host their
Global Development
Centre for 3D Business
Experience Platform
RM13,673
Average Salary (excl. CEO): Average Salary (excl. CEO):
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
TOTAL APPROVED INVESTMENTS IN 2017
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MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
The Services sector
continued to lead with
investments of
RM121 bil, followed by
the Manufacturing and
Primary sectors
INVESTMENTS BY SECTOR
Manufacturing
RM63.7 bil (32.3%)
Primary
RM12.4 bil (6.3%)
Services
RM121.0 bil (61.4%)
RM197.1
Billion
Source: MIDA
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MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
TOTAL APPROVED INVESTMENTS IN 2017
26
RM197.1 bil
2016: RM212.9 bil
5,466 projects
2016: 5,166 projects
139,523 2016: 154,491
RM197.1
billion
DDI RM142.4 bil (72.2%)
FDI RM54.7 bil (27.8%)
2016: RM59.1 bil (27.6%)
2016: RM153.8 bil (72.4%)
Source: MIDA
Overall approved investment in 2017 dropped by 7.4% corresponding to a slight dipped in the services sector. However, the year 2017 recorded a rise of 5.8% in number of projects approved
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
Malaysia remains a favourable investment destination
Expansion/ Diversification
Projects RM24.2billion
38%
New Projects RM39.5 billion
62% RM63.7 billion
NEW & EXPANSION/DIVERSIFICATION PROJECTS APPROVED IN MANUFACTURING SECTOR 2017
Manufacturing
FDI: RM13.9 bil DDI: RM10.3 bil
360 projects
26,646
FDI: RM7.7 bil DDI: RM31.8 bil
327 projects
29,775
Source: MIDA
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MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
EMPLOYMENT CREATION
28
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 29
197.2
212.9
193
Total Approved Investments
TOTAL APPROVED INVESTMENTS & EMPLOYMENT IN 2015 -2017
139,523 154,491
180,244
Employment
RM billion
2017 2016 2015
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 30
EMPLOYMENT BY TYPES OF ECONOMIC ACTIVITY
Economic
Activity
2013 2014 2015 2016 2017
Agriculture 1.79 mil 1.80 mil 1.75 mil 1.75 mil 1.84 mil
Mining and
quarrying
78,000 78,000 97,000 86,000 82,000
Manufacturing 2.35 mil 2.39 mil 2.38 mil 2.40 mil 2.44 mil
Construction 1.26 mil 1.24 mil 1.31 mil 1.28 mil 1.33 mil
Services 8.06 mil 8.35 mil 8.54 mil 8.66 mil 8.79 mil
Total
Employment
13.6 mil 13.9 mil 14.1 mil 14.2 mil 14.5 mil
Total Labour
Force
13.9 mil 14.2 mil 14.5 mil 14.8mil 15.0 mil
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
Among projects approved in 2016 & 2017 and implemented as at 31 December 2017
Manufacturing
PROJECTS IMPLEMENTED AS AT 31 DECEMBER 2017
31
2,726 (14%) with salary above
RM5k
18,911 employment
270 projects
4,935 (9%) with salary above
RM5k
53,136 employment
652 projects
2017 2016 Inari Technology Sdn.Bhd.
Infineon Technologies (Malaysia) Sdn. Bhd
Osram Opto Semiconductors(M) SB
Greatech Integration (M) Sdn. Bhd.
Salutica Allied Solutions Sdn.Bhd.
Omni Oil Technologies (M) SB
Press Metal Bintulu Sdn. Bhd.
Spirit AeroSystems Malaysia Sdn. Bhd.
Keysight Technologies Msia SB
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 32
EMPLOYMENT CREATION IN 2017 The year 2017 saw many companies undertaking opening ceremonies and
ground-breaking announcements
More than 7,000 actual jobs from
quality investments created by
these companies.
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
TRANSFORMATION OF E&E SECTOR
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MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 34
EVOLUTION OF MALAYSIA’S E&E INDUSTRY • Started in 1970’s
• Consumer Electronics: Clarion and Bosch
• Labour Intensive
• Low Technology Products
• Low value added
• Capital Intensive
• Knowledge Based
• Hi-Tech
• High Value Added
Consumer
electronics
parts to full
assembly
1980’s
Office &
computer
equipment (inc.
hard disk drive
and hard disks).
Transition
into R&D
activities to
move up value
chain
1990’s
Simple
components,
semiconductor
parts assembly
and SKD
electrical
products
Higher value-added
products/activities :
R&D, IC & System
Design, Wafer fab, Ingot
growing
Low volume, high
complexity and high
mixed products.
Digital consumer goods.
2010’s
Sensors, Internet of Things
(IoT), Cloud Computing,
Wireless Electronics,
Nano Technology, SMART
Electronics, 3D Integration,
Smart Grid
Advanced Energy
Storage, Fablite, Fabless,
Miniaturization, Electric
Vehicle (EV)
Autonomous
vehicles, Robotic
servants,
Telekinesis, Virtual
Reality, Artificial
Intelligence, Smart
Machines
Manufacturing
• Components: AMD, HP, Intel, Osram, Hitachi and Texas Instruments
• Malaysia ranks 7th in global E&E exporters (World Trade Atlas, 2016)
1970’s Current Future
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 35
FROM MANUFACTURING TO R&D OPERATIONS
Motorola Solutions Malaysia started from manufacturing
activities in 1974 and gradually moved up the value chain
Today, Motorola Solutions Malaysia employs over 1,000
R&D engineers (100% locals) with qualifications
ranging from degree, masters and PhD.
Motorola Solutions Malaysia has the largest number of
E&D engineers among all Motorola Solutions
plants in the world.
Moving forward – to continue focusing more on R&D activities in Malaysia using
Malaysian capabilities.
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 36
Intel was engaged with Assembly & test
activities in the past and currently
engaged with full integration of assembly
& test including R&D activities with
complete IoT system solution involving
chipset, processors, and networking &
communication devices.
RM17 billion investment
8,000 Total Employees
Global Hub of Supplier Ecosystem
1,269 local vendors have been engaged
Collaborated with UiTM, USM, UTM, UTP,
UNITEN, MMU, UniMAP, UTAR for advisory
panels/curriculum development
FROM MANUFACTURING TO R&D OPERATIONS
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 37
Infineon is engaged in assembly, testing &
packaging of power semiconductor,
advanced logic semiconductor as well as
manufacturing wafer fabrication for
power and logic chip.
Infineon Malaysia is the only fully-
integrated operational facility for the
Infineon Group.
RM 14 billion of realised
investments
10,730 Total Employees
9,388 Malaysians
Competence Centre for Megatrend
Technologies and Technology
Advancement of Wafer Fabrication
Facility
Collaborated with UTAR, UniMAP,
USM, IIUM, UM, AIMST, and KDU
302 vendors in Kulim
FROM MANUFACTURING TO INTEGRATED OPERATIONS
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017 38
3,975 employees
R&D Centre established in 2005
Freescale Semiconductor was
established in 1972 and is currently
manufacturing semiconductors.
Located in Sungai Way Free Industrial
Zone, the company is also involved
with 2 manufacturing related services,
1 Freescale Asia Fulfillment Centre
Sdn Bhd (Shah Alam, Selling entity) -
FAFC and FAFC - Global Distribution
Centre in Shah Alam (2010) for
Freescale (19,000 sqf).
RM5.9 billion investments (as at 2016)
324 local suppliers
FROM MANUFACTURING TO FULFILLMENT CENTRE & DISTRIBUTION
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
THE WAY FORWARD
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MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
Global FDI flows are expected to bounce back in 2018, to almost USD1.8 trillion. Stronger economic growth in major economies, the gradual recovery in commodity prices and improved profits, prospects in various sectors could boost business confidence and thus multinational companies’ appetite to invest. Malaysia’s economic strengths: stable and supportive business environment, strong fundamentals, a talented workforce, a strategic location, and an effective government that has embraced creativity and innovation RM69.6 bil of investment in the pipeline for both Manufacturing and Services sectors. For 2018, we aim to secure at least RM80 bil in investment approvals and over 12 companies to establish their Principal Hub in Malaysia.
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INVESTMENT OUTLOOK – MALAYSIA
MALAYSIA INVESTMENT PERFORMANCE REPORT 2017
THANK YOU
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